From the belly of the beast: The Great Recession viewed from one factory

By Barry Sheppard, in San Francisco

During the 1980-82 recession, US car corporations were closing factories, reflecting growing international competition and overproduction. One of the plants closed was a large General Motors facility in the city of Fremont, California, part of the San Francisco Bay Area. This factory was reopened in 1984, in a deal between Toyota and GM. They formed a new corporation, New United Motors Manufacturing, Inc. (NUMMI). Toyota held 70% and GM the rest, with management largely from Toyota.

NUMMI is to be shut down on March 31. Some 4700 workers will lose their jobs. Many plants around the world that supply parts to NUMMI will be affected. In California alone, the jobs of 21,000 workers in parts plants may be gone. This is another big blow to workers in California, who are experiencing an official unemployment rate of 12%, compared to the national average of a little under 10%. It occurs in the midst of a financial crisis of the state, county and city governments, due to the loss of income resulting from the international recession that began in late 2007 and the refusal of the capitalist politicians to raise taxes on the rich.

It is often said that California has been ahead of the rest of the country, setting new trends in culture and lifestyle. Now California is once again the vanguard, this time in slashing social services. At a recent conference of governors, it was noticed that almost all states are in dire financial straits. The chairperson of the National Governors Association, a Republican, stated: “Because of the decline in state revenues, 43 [of the 50] states cut $31 billion from their budgets in 2009. For the fiscal year 2010 … 36 states have been forced to cut $55 billion. Thirty states have cut elementary, secondary and higher education.”

Jobs gone forever

The NUMMI jobs are gone forever. This too reflects a trend in California and throughout the nation. In past recessions, most workers who were laid off were recalled to the same jobs in the economic recovery. That has changed for many workers. They will have to get jobs in other industries, often with lower wages and worse conditions, when they are finally able to find work.

Peter Goodman, writing in the February 21 New York Times, reports that long-term unemployment (over six months) has risen to its highest level since records were first compiled in 1948. Under the headline “Despite Signs of Recovery, Chronic Joblessness Rises”, he writes, “Even as the American recovery shows tentative signs of rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

“Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed. Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.” By “middle class”, the capitalist media mean workers with better jobs with higher wages and benefits, often in unions, like the soon-to-be-former NUMMI workers.

When NUMMI was first formed, the company agreed to recognise the former United Automobile Workers local from the old GM plant. Union contracts with NUMMI over the years were some of the best in the industry and in the area. Work on a car assembly line is hard. Many new hires found they couldn’t take it. But the wages and benefits — health care, retirement pay, life insurance and job security under the UAW contract — made it an attractive place to work. The NUMMI work force is diverse, including African-Americans, Latinos, Filipinos and other minorities. Many women were hired. In fact, white males are in the minority.

When GM went bankrupt last year, part of its reorganisation included shutting plants. Especially hard hit was the Detroit area, which had already suffered from cutbacks by GM, Ford and Chrysler. Part of the GM reorganisation was that it pulled out of NUMMI, leaving Toyota in charge. Toyota has since decided to close NUMMI.

UAW concessions

Undoubtedly, the reason Toyota chose NUMMI to close, as part of its own reorganisation, was that it was the only union shop among Toyota plants in the US. Toyota built its plants in the largely non-union south. It was able to keep the UAW out by providing the same or better wages and benefits as in the UAW-organised plants, although without union job protection.

For decades, the UAW top misleaders have been making concessions to the car companies, especially since 1986. They sold these concessions to the workers as necessary to “save jobs”. But not a single job has been saved by these policies. In the past few years, concessions have accelerated and reached new lows in the 2007 contracts with the Big Three (GM, Ford and Chrysler).

These contracts established a permanent two-tier system, dividing the workers between new hires and those already on the job. Two-tiers had been introduced before, but with new hires moving up after a time until they were on a par with the rest of the workforce. Wages for new hires were cut in half, from an industry level of $28 per hour to $14-$16 per hour, and with commensurate cuts in working conditions for all employees. Further concessions were made in the current recession at GM and Chrysler, the union pledging not to strike when the contracts reopen in 2011. The UAW misleaders have basically given up. Why pay dues to a union that negotiates cutbacks for the workers?

The NUMMI contracts did not expire on the same schedule at those at the Big Three. Negotiations began at NUMMI in 2009, so workers still had the better conditions of their previous contract. Then GM in June pulled out. Toyota wasn’t going to negotiate from the starting point of the current contract — no agreement was reached and then Toyota announced the shutdown.

‘The Barking Dog’

The UAW national leadership calls itself the “Administration Caucus”, perhaps to highlight that it is the bureaucracy, the privileged group of officials that control the union. It is this caucus that has presided over the concessions of past years. There have been attempts to counter the policy of the Administration Caucus during this time. Counter-caucuses were organised. One was initiated by a national figure in the UAW leadership, Jerry Tucker, called New Directions. Without going into details, New Directions fell apart, but other formations arose, the latest being the Soldiers of Solidarity.

My late companion, Caroline Lund, worked at NUMMI for 14 years before her death in 2006. She joined the fightback groups nationally. There were two caucuses in the local at NUMMI, the Administration Caucus and the People’s Caucus, when she was hired. The People’s Caucus had a tenuous relation with New Directions nationally. In 1998 she began to publish her own plant newsletter, “The Barking Dog”, at first to give information to the ranks because the Administration Caucus kept workers in the dark about what was happening in the union and the factory. It broadened out to defend the ranks against company attacks as well as the failures of the leadership to do so.

To give a flavour of what the Japanese top management were like, they first tried to suppress “The Barking Dog” when it criticised some company anti-worker measures — it seems that in Japan the Toyota management never tolerated such insolence from the workers.

They were taken aback when they learned that US labour law, won by the union movement’s struggles, protected such material. Then the Administration Caucus leaders threatened to sue Caroline for libel. They ran into a wall when Caroline fought back publicly in the plant, and were forced to retreat. As a result of this fight, the rank and file elected Lund to the executive committee as an independent in 2000.

She continued to educate the workers through “The Barking Dog”. This helped set the stage for the defeat of the Administration Caucus in elections in 2003. The People’s Caucus had broadened to include some of the better people in the opposing group and took over the leadership. Caroline was able to work with the new leadership, although she remained independent and “The Barking Dog” took them on when necessary. She also helped turn the union newspaper from publishing fluff to including pro-worker articles.

In the recent period, this leadership retreated. When the union newspaper criticised them, they shut the newspaper down last May. In the current situation, the newspaper and “The Barking Dog” are needed more than ever, because the leaders have kept the ranks completely in the dark about what is happening in the negotiations around the shutting of the plant.

Management offered $50,000 to each worker as a “retention bonus” for staying on the job until March 31. The workers viewed this as an offer of severance pay. But recently management has made some noises that, because March 31 is approaching, it may withdraw the offer. The leadership has been silent on this, as well as on what will happen to pensions, medical coverage and other benefits. This has provoked fury among the workers. A recent union meeting almost became a riot as the chairperson of the bargaining committee was shouted down for his failure to provide any information.

The officials have put forward a “boycott Toyota” campaign, appealing to US nationalism with the supposed aim of pressuring the company to keep the plant open. This patently ridiculous proposal, utterly ineffective, has been endorsed by the national UAW and the AFL-CIO, the peak union body. It has also provoked anger among the workers, who wonder why GM has been let off the hook, since it is also responsible for the plant closing. The suspicion is that the local leadership is kowtowing to the national Administration Caucus because of its cosy relations with GM executives and the financial stakes the UAW has since it took over the pension fund, letting GM off the hook, in the 2007 giveaway contract. Moreover, a “boycott Toyota” campaign is not going to sit well with the thousands of workers in Toyota’s plants in the US, further alienating them from the UAW.

A leader of the local has also charged the main leaders with financial irregularities, allegedly lining their pockets with union funds before the local shuts down. As a result, the Department of Labor has subpoenaed the local’s books. What’s happening to the union local at NUMMI unfortunately gives a glimpse of the labour movement nationally, another way to view the national crisis through the NUMMI lens.

[The title of this regular column, “From the belly of the beast”, was how the great Cuban fighter against US imperialism Jose Marti, signed his letters to friends back in Cuba when he was in the US.]